FEMSA in €1.2 Billion Sustainability-Linked Notes Offering
April 28, 2021
Cleary Gottlieb represented Fomento Económico Mexicano S.A.B. de C.V. (FEMSA) in a sustainability-linked offering of €700 million 0.5% senior notes due 2028 and €500 million 1% senior notes due 2033.
The issuance represents the largest ever sustainability-linked bond by a Latin American issuer, backed by 196 international institutional investors and oversubscribed 1.9 times. In connection with the notes, FEMSA adopted and published its sustainability-linked bond framework, which includes certain sustainability performance targets that are aligned with FEMSA’s overall sustainability strategy priorities for 2030. Each series of notes is subject to an interest rate step up of 25 basis points unless certain sustainability performance targets are satisfied.
The proceeds from the issuance will be used to redeem FEMSA’s €1 billion 1.75% senior notes due 2023, and the remainder, if any, will be used for general corporate purposes.
HSBC Bank plc, J.P. Morgan Securities plc, and Merrill Lynch International acted as underwriters for the transaction. The transaction priced on April 22, 2021, and closed on April 28, 2021.
FEMSA is a leading Mexican company that participates in the beverage industry through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world; in the retail industry through FEMSA Comercio, operating OXXO, the largest- and fastest-growing chain of small-format stores in Latin America; and in the beer industry, as a shareholder of Heineken, one of the world’s leading brewers with operations in over 70 countries.